It appears that Mandeville government employees might not be socked with giant insurance premium increases after all. City officials have found a way to counter the City Council's decision to pass along steep increases in health insurance costs directly to city employees, which ended a long-standing benefit of free coverage for the workers.

Mayor Donald Villere said city employees have agreed to a plan that should lessen the financial impact on the city's 129 employees without significantly dipping into public coffers to cover higher health insurance costs.

"We have selected a health insurance plan that is within the budget," Villere said Thursday.

The new plan requires employees for the first time to pay for part of their health insurance coverage, but the out-of-pocket expense will be less than a plan that was set to go into effect this year. It requires higher deductibles and co-pays, but lowers premiums for employees. The enrollment period begins Feb. 11.

The City Council last week narrowly voted down a proposal to allocate more city funds to cover a substantial increase in health insurance cost for employees in 2014. As a result, employees who now pay nothing for their individual health coverage were faced with having to pay $105 a month for coverage. The employees can currently insure their families for $46 a month; that will go up to $299 a month.

Donald Villere

Three of the five council members said the city could no longer afford to pump more money into health insurance for its employees. For the current fiscal year, the city has $2.1 million budgeted for insurance costs.

During an emotional discussion at its meeting last week, the council considered several options designed to lessen the impact on city employees, but all failed to gain a majority vote. Each would have required the city to bolster the amount now allocated for insurance costs.

Several employees addressed the council, noting that they work for the city at pay rates lower than what they can make in the private sector because the health insurance benefit offsets the lack of pay. Some said they would no longer be able to afford to work for the city government if their premiums for family coverage jumped to nearly $300 a month. Two former city council members spoke on the employees' behalf.

Other citizens, however, told the council that city employees should no longer expect taxpayers to provide them with free or lower-cost health insurance when almost everyone else has had to shoulder drastic insurance premium increases of their own.

Mandeville Councilman At-Large Rick Danielson, who offered several amendments designed to soften the blow on employees, said in a news release Thursday that the city's history of paying 100-percent of employee insurance costs and a high percentage of family insurance was unsustainable in the long term, but that thrusting such a large burden on them all at once is damaging.

"Rising insurance costs are beyond our control, but we should do all we can to cushion the impact on city employees, many of whom earn relatively low wages," he said.

Danielson favored phasing in employee contributions to their insurance plan, saying he was "very disappointed a majority of my colleagues couldn't see their way to supporting city workers in this way" but was "optimistic with the potential for a new option the mayor has discovered."

Villere said in a memo that he met with employee groups and insurance consultants to come up with a plan "to reduce the monthly employee premiums and remain within the city budget." The consensus of the group was to change to a plan with higher deductibles, but lower premiums for employees.

The mayor said the city can enact the higher deductible plan without the need for significant budget changes.

Under the plan, employees would contribute $22.68 bi-weekly for their coverage. For employee and family, the bi-weekly contribution would be $64.74, according to city documents.

Councilman David Ellis, who voted against the budget amendment to allocate more city money to employee health insurance, said previous councils and administrations should have addressed the issue of phasing in insurance costs for employees years ago.

"Although I appreciate that this is a difficult decision for the council to have made and for employees to accept... I wish that things would have started changing years ago to mitigate this impact," Ellis said in a news release earlier this week. "I also believe in being accountable to the people of Mandeville for how we manage their money. This was a difficult vote, as I know it impacts many employees. But the bottom line isn't just fiscal and it isn't just ideological; it's practical."

Councilman Ernest Burgieres, who voted with Ellis and Councilman Clay Madden against the budget amendment last week, questioned why the new alternative was not discussed with employees before last week's controversial council meeting.

"Couldn't this decision have been made several weeks ago? " he said. "So unnecessary."